If I receive a 1099-int in the name of my LLC and in my LLC's EIN, should I report this as Business Income on Sch C or should I report this as personal income on Sch B?

[Marketstar]

Are you a Single member LLC?

[schnej1]

Yes, I am a single member LLC.

[schnej1]

Ive read conflicting advice...1. Report it as personal interest income on SchB even though it is under my EIN. I'm not too comfortable doing this. It doesn't seem correct. 2. Report it as Business Income on Sch C. But I read the IRS pub instructions and it specifically says NOT 1099 income.  TT suggested that they mean 1099-MISC, not 1099-INT.  I find it hard to believe that they wouldn't be specific. The instructions for other business income says interest from notes or receivables. My interest was from a CD and a checking account.  That seems pretty common.  Why didn't they address these common forms of interest if this is where it should be reported? Also, on TT, when I go to other business income, it says.... "these are uncommon". Well CD and checking interest from a bank is not uncommon?!!!! HELP!

[Marketstar]

The IRS considers a Single Member LLC to be a disregarded entity-meaning the LLC and the individual are one in the same.

Therefore the interest income should be entered as a Schedule B item.

[Marketstar]

My answer stands, as a disregarded entity, you and the LLC are one in the same for tax purposes. The interest income to your LLC is income to you personally-Schedule B.

[stephenslawter]

Conflicting answer: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3757844-how-to-report-1099-int-interest-income-received-by-an-llc-...>

[saldirj]

From IRS 2019 Pub 334 page 30:
"Additions to Gross Profit
If your business has income from a source other than its regular business operations, enter the income on line 6 of Schedule C and add it to gross profit. The result is gross business income. Some examples include income from an interest-bearing checking account, income from scrap sales, income from certain fuel tax credits and refunds, and amounts recovered from bad debts."

So it would get reported as "Other Income" on Schedule C

Reading the IRS document on Disregarded Entity, it does say "

Owner of Single-Member LLC

If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:

• Form 1040 or 1040-SR Schedule C, Profit or Loss from Business (Sole Proprietorship)  
• Form 1040 or 1040-SR Schedule E, Supplemental Income or Loss 
• Form 1040 or 1040-SR Schedule F, Profit or Loss from Farming "

Reading this says that yes it does get reported on the Owner's Federal Tax Return as opposed to a separate tax return for the corporation, but if the Interest is earned by the "Disregarded Entity", it should be reported on Schedule C of the Owner's Tax Return.

[adm_archery]

Are you 100% sure and you disagree with: 

Marketstar

Level 7

‎June 4, 2019 3:40 PM

My answer stands, as a disregarded entity, you and the LLC are one in the same for tax purposes. The interest income to your LLC is income to you personally-Schedule B.

???

[adm_archery]

Are you 100% sure and you disagree with:

saldirj

Level 3

‎June 27, 2020 6:08 AM

From IRS 2019 Pub 334 page 30:

"Additions to Gross Profit
If your business has income from a source other than its regular business operations, enter the income on line 6 of Schedule C and add it to gross profit. The result is gross business income. Some examples include income from an interest-bearing checking account, income from scrap sales, income from certain fuel tax credits and refunds, and amounts recovered from bad debts."

So it would get reported as "Other Income" on Schedule C

Reading the IRS document on Disregarded Entity, it does say "Owner of Single-Member LLC

If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:

• Form 1040 or 1040-SR Schedule C, Profit or Loss from Business (Sole Proprietorship)  
• Form 1040 or 1040-SR Schedule E, Supplemental Income or Loss 
• Form 1040 or 1040-SR Schedule F, Profit or Loss from Farming "

Reading this says that yes it does get reported on the Owner's Federal Tax Return as opposed to a separate tax return for the corporation, but if the Interest is earned by the "Disregarded Entity", it should be reported on Schedule C of the Owner's Tax Return.

???

[RobertB4444]

Yes, @saldirj is correct.  The interest income from a checking/savings account owned by a disregarded entity is reported on Schedule C, not the Schedule B of your personal return.

That being said - a disregarded entity is only a viable plan if it is operating at a breakeven or a loss.  Disregarded entities are a bad idea if it is earning a profit.

@adm_archery